The letter reminds bosses in the financial services sector that the responsibility to assess whether a candidate is ‘fit and proper’ to carry out a role rests with the firm and they should have robust recruitment, referencing and due diligence processes.

The FSA has said it will undertake close vetting of appointments and will expect to interview candidates applying for ‘significant influence functions’ (SIFs) roles.

The tough new regime is one of the FSA’s responses to the financial crisis, which exposed governance and risk management shortcomings across numerous firms in roles such as chair, chief executive, and finance or risk director.

Firms are also urged to provide sufficient information with their applications (for example, head-hunter reports) and the rationale they have used to conclude that the candidate is fit and proper to perform the role.

Graeme Ashley-Fenn, FSA director of permissions, decisions and reporting, said: “The onus is on firms to ensure candidates applying for influential positions are fit and proper to perform the role. Our individually tailored approval interviews will help us assess whether the individual has the right experience and understanding but also whether they will enhance the overall management strength and insight of the firm.”